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This article was contributed by Pavel Bains, CEO of Bluzelle and executive producer of MixMob.
It’s 2002, before social media. The underground rap websites are talking about 50 Cent’s mixtapes. It’s a surprise to hear 50 Cent’s name again. He had dropped “How To Rob” in 1999, a track discussing the way he’d snatch money from the biggest hip-hop stars at the time. While his buzz was building up, in 2000, he was attacked and shot multiple times. And just like that, everyone forgot about him.
In the two years it took him to recover, his label dropped him, and no one in the New York rap scene wanted anything to do with him. He was an outcast. 50 needed to restart from the ground up, to build a buzz on the street level with mixtapes.
I had to listen, so I ordered all his mixtapes as CDs on HipHopSite.com. They were fire. Rap music at the time had gone full R&B, led by Ja Rule, so it was so refreshing to hear aggressive rap music again courtesy of 50 and his G-Unit crew.
Throughout 2002 his popularity kept building, with his team’s efforts. No support from record labels. But eventually, a bidding war did start between the labels. Dr. Dre and Eminem ended up signing him to one of the biggest contracts for a new artist ever. In his words: “Got a mil’ out the deal and I’m still on the grind.” In February 2003, 50 Cent drops his debut album Get Rich or Die Tryin’ and shatters all records. He goes on a three-year run, ruling the rap scene. 50 and his G-Unit crew are everywhere.
How does all this relate to crypto? Well, I believe that if 50 Cent broke out now, he would establish a G-Unit DAO.
What is DAO and why it’s on fire right now
A DAO is a decentralized autonomous organization. In simpler terms, it’s a community that pools their crypto together to deploy it for a certain project or cause.
For pooling their money, community members get a token that represents the DAO. Over time, the value of the token should increase based on the returns it generates. It’s similar to venture capital funds, but “wider” and more democratic; members of the DAO get to vote on how the funds are deployed based on what brought the community together in the first place.
And, as is the case with crypto, everything is transparent and executed by computer programs.
As an example, let’s take an imaginary NFT DAO. Members will propose which NFT items or collection they want to buy, vote on every proposal, and those that are green lighted, the DAO moves ahead and acquires. Later, when a vote is passed to sell a specific item, the returns are distributed between the DAO’s token holders.
Now let’s imagine how a DAO approach would have looked like for 50 and his crew, his artist roster, and of course, the fans.
Dropping a DAO and the $G-Unit toke
Forget about getting $1 million as an advance and owing several albums to a label. 50 Cent could have raised $20 million through a G-Unit DAO and used the money to hire the same producers his record label had.
If I was willing to order his mixtapes online, don’t you think I would have purchased the $G-Unit token with the promise of getting the inevitable album and a share of all future earnings?
Next, his entire roster of artists 50 chaperoned would have their albums released through the DAO; Lloyd Banks and The Game sold millions of albums. G-Unit clothing and sneakers would be part of the mix too. His TV show Power and BMF would be financed by the DAO. And the fans, like myself, who joined the DAO by purchasing the $G-Unit token would be getting profits from everything. And because 50 had a supportive community, he could first test ideas with DAO members through proposals and votes to see what resonates. He would have reduced risks with the community.
How much would the fully diluted valuation (FDV) of the G-Unit DAO be worth? It’s hard to imagine. Considering the vast array of ventures 50 was involved in, and how popular and successful he was at the time, we’re talking hundreds of millions. His deal with Vitaminwater netted him $100M after Coca-Cola bought the company. 50 could have become the first hip-hop billionaire, a decade before Dr. Dre.
As someone who felt he discovered 50 Cent before the mainstream, I’d be committed to the DAO and never sell the token. The token would validate that I was there from the start. Like with NFTs, there is a cache to holding tokens.
Looking at the financial side, if returns keep coming to me from all the wins of 50’s projects, it becomes an income stream that I can count on, like dividends paid from a company. Given that hit songs are evergreen, I’ll be getting money as long as 50’s music is played and shows keep getting watched. (The cast of Friends are living off their royalties to this day, despite most of them not working for years.)
Hate it or love it: DAO is not for everyone
Now I don’t think every artist should establish a DAO, not even in today’s crypto-humid climate. Here’s why.
Music is content, and content is hit-driven. With that said, the fact is that most artists don’t shine. The few that do need a label to hone their talent and market them to the masses. A record label is like a basketball team with a coach and a system to help the players flourish. There is a reason Death Row Records and Bad Boy Records were and still are massive — labels know how to make the system work.
But every once in a while, an artist like 50 Cent comes along with the rare combination of superior talent and business savvy. For someone like him, a DAO works. The DAO harnesses community power by pooling funds for projects that aren’t owned by a label or Hollywood, but by the artist and his fan base.
Crypto music platforms don’t provide the best solution for artists, either. They might distribute money more fairly, but at the end of the day, crypto music platforms are just a decentralized Soundcloud with hundreds of thousands of mostly mediocre tracks. As a fan of music, I feel it would be better not to fund that. I want to be a part of the next music juggernaut.
Given how artists can now build their audience online, it’s inevitable that another 50 Cent will emerge, and hopefully establish a DAO that will shake up, and perhaps even break, the entire entertainment industry. And when my kids start talking about this new 50 Cent, I’ll be first in line to buy that token.
Pavel Bains is the CEO of Bluzelle and executive producer of MixMob. Pavel has an extensive background in gaming and digital media, having run studios and licensing deals with Disney, Microsoft, Warners Bros, and DreamWorks.